February 1, 2013, MichiganVotes.org Weekly Roll Call

Senate Bill 61, Convert Blue Cross to non-profit "regular" insurance company: Passed 36 to 0 in the Senate To convert Blue Cross Blue Shield into a “mutual insurance company” and make it subject to the same regulations as regular health insurers. Although it would remain a non-profit, current restrictions on the entity's ability to own for-profit subsidiaries would be reduced, and it would no longer be subject to close oversight by the state Attorney General. In return for being granted this conversion, BCBS would pay "up to" $1.56 billion over 18 years (meaning it could be less) into a fund that would supplement various health-related government programs, with specific spending items selected by a board of political appointees. The bill does not include abortion restrictions that caused Gov. Snyder to veto the same measure when passed late last year.

In his annual State of the State address, Gov. Rick Snyder called on the Legislature to explore ways to find an additional $1.2 billion annually to spend on road repairs. This week the Senate responded with a package of tax hike bills.

Senate Joint Resolution J: Replace gas tax with higher sales tax Introduced by Sen. Randy Richardville (R), to place before voters in the next general election a Constitutional amendment to impose a 2 percent sales tax increase, with at least 90 percent of the new revenue going to road projects, and most of the rest to municipal bus system subsidies. This would replace the state gas and diesel tax (see Senate Bill 85). At the proposed new 8 percent rate, Michigan would have the nation’s highest state sales tax (although higher rates are imposed in some local jurisdictions). Reportedly the measure is offered as a “Plan B” alternative to the large fuel and/or vehicle registration tax increases proposed by Senate Bills 87 and 88. Referred to committee.

Senate Bill 87: Replace current fuel taxes with higher wholesale tax Introduced by Sen. Roger Kahn (R), to replace the current 19 cent per gallon gas tax and 15 cent diesel tax with a new tax based on the wholesale price of fuel, initially levied at a rate of 37 cents per gallon. This would also become the minimum gas tax rate even if wholesale prices fell. If wholesale prices rose the maximum tax would be 50 cents per gallon, but the rate could not rise more than a penny a year. When added to current federal fuel taxes and the 6 percent state sales tax also imposed on fuel (revenue from which does not go to roads), this would give Michigan the nation’s highest total gasoline tax levy at nearly 74 cents per gallon, assuming current wholesale and after-tax pump price levels of around $2.74 and $3.50, respectively. (New York is currently number 1 at 67.4 cents per gallon.) See also Senate Joint Resolution J, a “Plan B” alternative that would instead hike the state sales tax to 8 percent and use the extra revenue to replace current fuel taxes. Referred to committee.

Senate Bill 88: Increase vehicle registration taxes by 80 percent Introduced by Sen. Roger Kahn (R), to increase the annual vehicle registration (license plate) tax by approximately 80 percent, with comparable increases for trucks and trailers. As an example, the annual tax on a car with a $20,000 list price would increase from $98 to $176, and under Senate Bill 86, remain at this level until the vehicle is 10 years old (when it would drop to 50 percent). See also Senate Bills 84 to 87 and Senate Joint Resolution J. Referred to committee.

Senate Bill 86: Revise, increase vehicle registration taxes Introduced by Sen. John Pappageorge (R), to revise various vehicle registration tax details. Among other things, the bill would change the basis on which the car and pickup tax is assessed. Instead of the basis gradually dropping to 72.9 percent of the list price and staying there from the fourth year on, the basis would become 100 percent of the value when new until the car is 10 years old, when it would drop to 50 percent, a change that would extract approximately $64 million more annually from owners. The bill would also end the current one-time $75 trailer registration tax, returning to an annual tax on trailers; those who had already paid the one-time tax would be “grandfathered.” Referred to committee.

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